Project Summary Schizophrenia is a leading cause of disability for Veterans. The CATIE studies have demonstrated that the current treatment of schizophrenia does not produce results that are fully satisfactory to either clinicians or their patients, because both groups repeatedly switched medications to try to obtain better treatment response with fewer side effects. Cognitive rehabilitation efforts show similar ceiling effects. All currently available drugs have D2-dopamine receptor blockade as their primary pharmacological effect. The NIMH MATRICS program was established to find new therapeutic targets for schizophrenia, in addition to dopamine-D2 receptor blockade, because pharmaceutical companies have been slow to develop such targets. The NIMH emphasis was on candidate mechanisms that would improve neurocognition in schizophrenia. At the NIIMH-sponsored MATRICS consensus meeting, alpha7-nicotinic acetylcholine receptor agonism was selected as the leading candidate for new drug investigation, based on the findings of this Merit Review project. No pharmaceutical company has completed a clinical study of an alpha7-nicotinic agonist in schizophrenia.